MADRID: The number of people unemployed in Spain, which has the highest jobless rate in the industrialised world, rose in January putting an end to five straight months of declines, the labour ministry said Wednesday.

There were 4.23 million people registered as jobless last month, up 130,930 or 3.19 percent from December with over 80 percent of the job losses coming from the service sector, it said in a statement.

Compared with the total 12 months ago the figure was up 4.51 percent, or 182,510.

Prime Minister Jose Luis Rodriguez Zapatero said he would not "resign" himself to these "bad" figures.

"There is no consolation in these unemployment figures nor any mitigating circumstances," he said after signing a "grand social pact with business leaders and unions on sweeping reforms to revive the economy.

The pact includes incentives for companies to hire unemployed youths as well as an agreement on the outlines of a reform to Spain's collective bargaining system, which ensures joint wage rises across sectors and industries.

The government does not provide a jobless rate, but the national statistics institute, which uses a different calculation method from the labour ministry, said last week that the rate had surged to 20.33 percent at the end of 2010.

That rate is the highest in the industrialised world and easily exceeds the government target of 19.4 percent for the year.

The Spanish economy, the European Union's fifth biggest, slumped into recession during the second half of 2008 as the global financial meltdown compounded the collapse of a labour-intensive construction boom.

It emerged with tepid growth of just 0.1 percent in the first quarter of 2010 and 0.2 percent in the second but then stalled with zero growth in the third.

Zapatero has said the fourth quarter will show positive growth which would pick up steam in 2011 but he warned that job creation would be "far from what we need and desire. It will be slow and progressive."

Economy Minister Elena Salgado told Onda Cero radio on Wednesday that "between 50,000 and 100,000 jobs will be created this year" as the pace of the economic recovery picks up during the second half.

Last October the government raised its forecast for the jobless rate for 2011 to 19.3 percent, from a previous estimate of 18.9 percent, due to the effects of government spending cuts aimed at reining in a massive public deficit and reassuring nervous markets that Spain will not need an Irish-style bailout.

It predicts the jobless rate will dip to 17.5 percent in 2012 and 16.2 percent in 2013.

Last year the government introduced a hotly contested labour market reforms which cut the country's high cost of firing workers and gave companies more flexibility to reduce working hours and staff levels in economic downturns -- changes that it argued would boost job creation.